Liberalism against neoliberalism: Resistance to structural adjustment and the fragmentation of the state in Russia and Hungary

For much of the twentieth century, the Soviet Union provided an economic and ideological alternative to capitalism and its liberal foundations. As a result, hard-edged liberalism in the capitalist world was often softened by socialist touches to win the global competition for hearts and minds of the poor. The economic catastrophes of the 1930s had demonstrated to the capitalist countries of the world that they could only assure the stability of both state and economy if they provided for the desperate. As a result, the welfare state emerged first as a pragmatic solution to the problem of system collapse in the face of a communist alternative. It was later rationalized in theoretical terms by the creation of an economic and normative theory that required liberal states to care for the worst off among their populations, a theoretical arc of welfare liberalism that goes roughly from Keynes to Rawls. By the 1980s, just as the Soviet Union and its allied states were themselves realizing that they needed capitalist touches to keep their socialist systems going in the face of global economic pressures, welfare liberalism in capitalist states was under attack from the right, particularly in Britain and the United States.